BC Advantage Funds (VCC) Ltd.

BC Advantage Funds (VCC) Ltd.

July 05, 2016 17:48 ET

BC Advantage Funds Announces Completion of Its Strategic Review Process and Plans to Dissolve the Company

NORTH VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 5, 2016) - B.C. Advantage Funds (VCC) Ltd. (the "Company") today announced that its Board of Directors ("Board") has concluded a review of the Company's strategic alternatives and determined that a liquidation and dissolution of the Company is the best alternative for maximizing shareholder value. Effective immediately, the Company will cease to carry on business except as may be required to wind up the business and affairs of the Company.

Shareholder Approval

The Board has called an annual and special meeting of shareholders of the Company (the "Meeting") for July 29, 2016 to approve a number of items, including: (i) the voluntary dissolution of the Company under Division 2 of Part 10 of the Business Corporations Act (British Columbia) ("BCBCA") or, in the alternative and in the circumstances set out in the form of resolution, the voluntary liquidation and dissolution of the Company under Division 3 of Part 10 of the BCBCA, (ii) the settlement of all of the assets of the Company on the Liquidation Trustee (as defined in the information circular in respect of the Meeting (the "Circular")) on trust that the Liquidation Trustee assume and pay all of the liabilities of the Company, and distribute any remaining assets of such trust rateably to the shareholders of record as of the date of dissolution of the Company, (iii) the disposition of all or substantially all of the undertaking of the Company, and (iv) the reduction of the capital of the Company on the winding-up of the business and affairs of the Company (collectively the "Dissolution Resolution") and (v) certain other matters, including the election of the Board of Directors, and the appointment of KMPG LLP, as auditor of the Company. For the liquidation and dissolution to proceed, the Dissolution Resolution must be approved by way of an ordinary and special resolution passed by a majority and at least two-thirds, respectively, of the votes cast by the Company's shareholders in person or by proxy at the Meeting.

Dissolution Process and Distribution

Upon receipt of the required shareholder approvals, the Company will settle, transfer and assign all of its assets (the "Settlement") to the Liquidation Trustee, as trustee of a trust (the "Trust"), on trust that the Liquidation Trustee will (i) assume, determine, and pay all of the liabilities of the Company; (ii) liquidate and convert all non-cash assets of the Company transferred to it pursuant to the Settlement; and (iii) distribute all of the net cash of such Trust after payment of all of the Company's liabilities and the Trustee's Fee (as described in the Circular) rateably to the beneficiaries of the Trust in one or more distributions of income or capital. The Company will then be dissolved. The beneficiaries of the Trust will be the shareholders of record of the Company as of the date of dissolution of the Company (other than such shareholders who validly exercise dissent rights as discussed in the Circular).

It is expected that the Company's shareholders (as beneficiaries of the Trust) will receive the net proceeds of the liquidation after the Liquidation Trustee pays all liabilities of the Company, receives a clearance certificate from the Canada Revenue Agency and converts all non-cash assets of the Company transferred to it pursuant to the Settlement. The distribution is expected to be made as soon as practical following the completion of the above.

The amount of the distributions will be determined by the Liquidation Trustee following review of the Company's tax and other potential liabilities, which are currently estimated to be approximately $0.98 million, its then cash on hand and net current assets, which as of June 30, 2016 was approximately $1.15 million, and the proceeds that the Liquidation Trustee anticipates it may obtain upon a sale of the Company's investments. Although management of the Company believes that its estimate of the liabilities and assets are reasonable based on information currently available to it, the actual amounts of such assets and liabilities may differ materially from the estimates presented above, thereby affecting the cash available to be distributed to the Company's shareholders. The Board is not currently aware of any material item that could give rise to unforeseen tax liabilities or other liabilities or costs which would materially reduce the amount of cash available for distribution to the Company's shareholders (as beneficiaries of the Trust), but there is no assurance that this will remain the case. Notwithstanding receipt of shareholder approvals for the matters described above, the Board may at any time determine that the dissolution of the Company is not the best alternative for maximizing shareholder value and decide not to proceed to implement the proposed transactions. Further, if the directors determined that it is in the best interests of the Company and its shareholders to dissolve the Company pursuant to a voluntary liquidation and dissolution under Division 3 of Part 10 of the BCBCA (a "Division 3 Formal Dissolution"), rather than under Division 2 of Part 10 thereof, the directors may proceed with a Division 3 Formal Dissolution.

About the Company

B.C. Advantage Funds (VCC) Ltd. is a venture capital corporation, formed under the Small Business Venture Capital Act (British Columbia), to invest in emerging technology companies in the Province. For more information about the Company, please visit our website at www.bcadvantagefunds.com.

Forward-Looking Information

This news release contains forward-looking statements and information within the meaning of applicable securities laws including statements regarding: the holding of the shareholders meeting; the approval of matters to be presented to the Company's shareholders at the Meeting; the liabilities and value of the assets of the Company; anticipated distributions to the Company's shareholders and expected timing thereof; and the implementation by the Board of the dissolution related transactions. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based upon currently available information to the Company. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in forward-looking statements. Risks include, but are not limited to: receipt of all required regulatory and shareholder approvals, changes in tax laws, the ability of the Liquidation Trustee to liquidate the remaining assets of the Company and make distributions to shareholders and the ability to dissolve the Company. Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this news release are made as of the date of this release, and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Contact Information

  • B.C. Advantage Funds (VCC) Ltd.
    Frank Holler
    Director and Chief Executive Officer

    B.C. Advantage Funds (VCC) Ltd.
    Ambrose Hong
    Director and Chief Financial Officer